Deficit smaller than expected
New Zealand reported a narrowerthan-expected current account deficit in the second quarter, while the annual deficit continued to widen.
The deficit was $618 million in the three months to June 30 versus a revised first-quarter surplus of $221m, Statistics New Zealand said.
The annual deficit was $7.5 billion, or 2.8 per cent of gross domestic product for the year ended June versus a deficit of $6.8b, or 2.7 per cent of GDP, in the prior year.
Economists had expected a deficit of $900m in the second quarter and an annual deficit of 3.1 per cent of GDP, according to a Bloomberg poll.
The biggest quarterly movement was in the services balance, which showed a narrower surplus of $778m in the second quarter versus a revised surplus of $2.7b in the first quarter. The services balance slid on the back of a decline in services exports while services imports edged higher.
The goods balance recorded a surplus of $1b in the three months to June 30 versus a revised surplus of $161m in the prior quarter. Exports were $14.3b while imports were $13.3b. In the first quarter exports were a revised $12.6b and imports were a revised $12.5b.
The financial account balance showed a surplus of $110m in the three months to June 30 versus a revised deficit of $787m in the prior quarter.
The balance on the capital account was a $14m deficit in the June quarter versus a revised $4m surplus in the prior quarter.
New Zealand’s net international liability position was $154.2b, or 57.5 per cent of GDP as at June 30, from a revised $153b or 57.8 per cent of GDP at March 31. The $1.2b increase was driven by a $2.8b change in net market price movements, Stats NZ said.
The value of New Zealand’s international assets was $249.8b as at June 30, driven by increases in reserve assets, portfolio investments and financial derivatives. Equity investments reached a record high of $104.9b as at June 30, up $2.6b compared to the prior quarter.
Foreign investment in New Zealand reached $404b as of June 30 versus $398b as of March 31. Equity investment by foreigners reached a record high of $113.2b, up $3.2b from March 31.
The net external debt position — excluding financial derivatives and equity — was $145.5b or 54.3 per cent of GDP at June 30 versus a revised $144.4b or 54.6 per cent of GDP on March 31.